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Acima initiates proceedings against CFPB's regulatory overreach

Wednesday 24 July 2024 10:48 CET | News

Lease-to-own solutions provider Acima, a subsidiary of Upbound, has announced its decision to file a lawsuit against the US Consumer Financial Protection Bureau (CFPB).

Initiating the proceedings in the US District Court for the Eastern District of Texas, Acima intends to cease what it asserts as the CFPB’s illegal attempt to extend its authority as limited by federal law and seize the long-standing state regulatory framework governing the lease-to-own industry. In addition, the complaint declares that the CFPB does not include the statutory authority to provide its enforcement action against Acima due to its flexible lease-to-own transactions not being considered loans, credit, or financing transactions as defined in the relevant federal statutes.

Acima, a subsidiary of Upbound, has announced its decision to file a lawsuit against the US Consumer Financial Protection Bureau (CFPB).

Moreover, Acima’s announcement follows the CFPB’s investigation into the company’s operations that began before Upbound acquired the firm in November 2021. At that time, the Attorney General of Nebraska assessed the business practices of Acima together with a coalition of attorneys general from 38 other US states. Also, the CFPB’s probe led to further details requests from Acima, after the initial civil investigative demand from October 2020.

Why did Acima file the complaint?

Currently, Acima’s proceedings claim that the firm’s transactions are already regulated by state laws that explicitly govern lease-to-own transactions across the US. In addition, the CFPB’s efforts to regulate them and impose obligations that conflict with those under applicable state law are not permitted under federal law. After concluding that the CFPB was not prepared to settle on acceptable terms despite its cooperation, Acima filed the complaint in the US District Court for the Eastern District of Texas.

According to Acima’s officials, the company is committed to full compliance with the laws of the US states in which it operates, planning to defend itself against the CFPB’s regulatory practices. Additionally, the company intends to maintain its focus on serving its customers with transparent and convenient solutions that support their livelihoods.

About Upbound 

As an omnichannel platform company, Upbound is committed to optimising financial opportunities for all individuals via inclusive and technology-enabled financial solutions that address the needs and demands of consumers. The firm’s customer-facing operating units include brands such as Rent-A-Center and Acima, with both companies facilitating consumer transactions across a range of store-based and digital retail channels, including 2,300 retail units located across the US, Mexico, and Puerto Rico.

Source: Link


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Keywords: regulation, financial services, credit access, financial inclusion, fraud management
Categories: Fraud & Financial Crime
Companies: Acima, Consumer Financial Protection Bureau, Upbound
Countries: United States
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Fraud & Financial Crime

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Acima

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Consumer Financial Protection Bureau

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